U.S. District Judge Amy Berman Jackson in Washington today
overturned an FDA decision that kept Watson from joining a
period of shared exclusivity granted to the companies that are
first to file for the right to market generic versions of
branded drugs. Actos is the world’s top-selling diabetes
medicine.

Jackson ordered the FDA to immediately allow Watson to
participate in what remains of the 180-day exclusivity period
previously awarded to competitors Mylan Inc. and Ranbaxy
Laboratories Ltd. Only the order was made public. Jackson sealed
her opinion because of trade secrets disclosed in the
litigation, pending arguments by the parties.

Watson sued the FDA in August, claiming the agency’s
decision to bar it from participating in the exclusivity period
was “arbitrary, capricious and contrary to law,” according to
the company’s complaint.

Sandy Walsh, a spokeswoman for the FDA, said she was unable
to comment immediately on the ruling.

Actos is the trade name of pioglitazone hydrochloride, the
world’s top-selling diabetes medicine marketed by Osaka, Japan-based Takeda. Actos had sales of about $3.4 billion in 2009,
Watson said in court papers, citing market researcher IMS
Health.

Patent Settlement

Watson and its two competitors reached a settlement with
Takeda in 2010 after “protracted” patent litigation, which
allowed it to start selling the generic version of the drug on
Aug. 17, 2012, according to court documents. Based on the
settlement and communications with the FDA, the Parsippany, New
Jersey-based company was preparing to sell its pioglitazone
product and promised delivery to customers, according to the
complaint.

In August, the FDA “informed Watson it had reached a
decision to award another filer or filers a period of 180-day
exclusivity,” according to Watson’s complaint. “FDA has failed
to provide any explanation or basis for its determination,” the
company claimed.

Generic-drug companies are given six months of limited
competition under the Hatch-Waxman Act, passed in 1984 to
promote quick applications that will lower the price of drugs.
The concession gives drugmakers the ability to keep prices close
to the branded level and set up distribution networks before
others enter the market. When more than one company files at the
same time, they may be granted shared exclusivity by the FDA.

The case is Watson Laboratories Inc. v. Sebelius, 1:12-cv-01344-ABJ, U.S. District Court, District of Columbia
(Washington).